For many Americans, the question isn’t if they’ll retire to Europe, but where.
This definitive guide dives deep into the choice of retiring to Spain vs Portugal from a US citizen’s perspective.
We break down the financial requirements of Spain’s Non-Lucrative Visa and Portugal’s D7 Visa, compare the minimum stay rules, and—most importantly—provide expert strategies for managing your US-based investments, pensions, and Social Security abroad.
Get the clarity you need to plan your transatlantic retirement with financial confidence.
American retirees are increasingly choosing Iberia for their next chapter, and the numbers back it up. In Spain, there are now roughly 41,000 U.S. citizens on the municipal rolls, while in Portugal, the U.S. community has surged to nearly 21,000.
But while these neighbours share sun-drenched coastlines and a relaxed pace of life, the paths to residency—and the financial planning required—are distinctly different.
This guide is designed to help Americans considering the move across the Atlantic, navigate that choice, moving beyond the lifestyle appeal to the financial realities of a transatlantic retirement.
The Spanish NLV is designed for individuals who have sufficient funds to support themselves (and their family) without needing to work in Spain. It’s often favoured by retirees with substantial savings or a high, reliable passive income.
Spain (NLV): Applicants must prove sufficient means equal to 400% of the IPREM benchmark for the main applicant (plus 100% per dependent). This benchmark, the Indicador Público de Renta de Efectos Múltiples, is a national standard used for various grants and visas.
Health Insurance: You must secure and pre-pay for a full year of private Spanish health insurance from an insurer authorised in Spain. The policy must offer coverage equivalent to the public system, with no co-pays or deductibles.
Find Spanish health insurance cover with PCC Insurance.
Application Process: You apply in person at the Spanish consulate with jurisdiction over your US state of residence. You cannot apply from within Spain. The initial visa is valid for 90 days, allowing you to travel to Spain and apply for your residency card (TIE). Find out more about the difference between the NIE and TIE in Spain.
Residency Path: The initial residency is for one year, followed by two renewals of two years each. After five years, you can apply for permanent residency.
Beyond the finances, you will also need to provide a medical certificate confirming you are free of any diseases that could pose a public health threat, and a clean criminal background check from the FBI and any country you have lived in for the past five years.
The D7 is often called the “passive income” or “retiree” visa. It’s ideal for those who can demonstrate a consistent, recurring stream of income from pensions, investments, rentals, or Social Security, even if the total amount is more modest than what’s required for Spain.
Portugal (D7): Retirees demonstrate predictable passive income (pension, rentals, dividends) roughly aligned with the Portuguese minimum wage level.
The Calculation: Based on the 2025 minimum wage of €820/month, the primary applicant must show 100% of this amount, which is €9,840 per year. You must add 50% for a spouse (€4,920/year) and 30% per dependent child (€2,952/year).
Proof of Funds: Portugal prioritises the regularity of your passive income. You will need pension award letters, Social Security statements, and dividend statements. While not a strict rule, it is highly recommended to open a Portuguese bank account and deposit a stable balance (typically €10,000 – €20,000) to show a buffer for your first year. Find out more about “the means of subsistence” in Portugal here.
Health Insurance: For the initial visa application, you only need travel health insurance that covers you for at least four months with a minimum of €30,000 in coverage. Once you are a resident, you will be able to register with the Portuguese National Health Service (SNS).
Application Process: You apply via the designated visa processing centre (e.g., VFS Global) in your US consular jurisdiction. The initial visa is valid for four months, allowing you to enter Portugal and attend an appointment with the immigration agency (AIMA) to receive your residency permit.
The Residency Path: The initial residency permit is typically valid for two years, followed by a renewal for three years. A major advantage of Portugal is that after five years of legal residency, you can apply for both permanent residency and Portuguese citizenship, although recent changes in regulation are making citizenship requests increasingly challenging. Find out more about these changes here.
The application will require a clean criminal background check from the FBI.
A crucial early step is obtaining a Portuguese NIF (tax number) and opening a local bank account, which is necessary to sign a lease and prove you have sufficient funds in the country.
This is a crucial lifestyle and tax consideration. To maintain and renew your residency, you must not be absent from the country for extended periods.
While the specific documentation can be complex, a high-level comparison helps to clarify the fundamental differences in financial thresholds, healthcare, and long-term benefits.
Here’s how the two visas stack up on the most critical points for American retirees.
| Feature | Spain (Non-Lucrative Visa) | Portugal (D7 Visa) | PCC’s Takeaway |
| Annual Income (Single) | ~€28,800 | ~€9,840 | Portugal has a much lower entry threshold. |
| Focus of Proof | Large liquid savings balance + income | Regular, predictable passive income stream | Your financial profile dictates the better choice. |
| Healthcare Requirement | Full private policy, paid 1-year upfront | Initial travel insurance, then access to SNS | Spain’s upfront cost is significantly higher. |
| Path to Citizenship | 10 years (with exceptions) | 5 years | Portugal offers one of the fastest paths in the EU. |
Planning on Retiring in Spain or Portugal?
Cross-border retirement isn’t just about getting a visa, it’s about sequencing your assets, minimizing taxes, and preserving lifetime income in two (sometimes three) jurisdictions.
Your US-dollar-based retirement funds will now need to cover euro-based expenses.
Build a 12 – 18 month cash flow that comfortably exceeds the thresholds in euros, account for exchange-rate swings, pre-fund private medical cover.
This means creating a budget with a significant buffer to absorb currency fluctuations without affecting your lifestyle.
For Social Security concerns, the U.S. has totalization agreements with both Spain (effective 1988) and Portugal (effective 1989).
These treaties can help you avoid paying Social Security taxes twice and allow you to combine coverage credits to qualify for benefits.
In short, you can usually keep receiving U.S. Social Security while resident in Spain or Portugal.
When it comes to Pensions and IRAs/401(k)s, the U.S.-Spain and U.S.-Portugal income tax treaties coordinate which country gets taxing rights over pension income and help relieve double taxation (generally via foreign tax credits).
Your exact liability will hinge on residency status and treaty articles specific to private pensions and annuities, so coordinating drawdown timing and withholding is essential. We already have a dedicated article on how to move to Portugal with your 401k here.
Portugal has adjusted preferential regimes in recent years; many retirees now face progressive Portuguese rates on foreign pensions unless a special regime applies.
Plan for potential Portuguese tax on U.S. pension distributions and model credits on your U.S. return.
Finally, the raw tax figure is multiplied by a coefficient based on the beneficiary’s kinship group and pre-existing wealth. This can increase the final bill significantly, especially for Groups III and IV.
Not necessarily on the same income.
As a US citizen, you must file a US tax return regardless of where you live.
However, due to the tax treaties with Spain and Portugal, you can typically claim a Foreign Tax Credit on your US return for taxes paid to your host country.
The goal is to avoid double taxation, but proper structuring is essential. This is one of the most complex areas of cross-border retirement.
Yes, but it can be complicated.
Many US brokerage firms have restrictions on serving clients with foreign addresses.
It’s vital to have a conversation with your financial institutions before your move and work with a wealth manager who specialises in cross-border clients to ensure you don’t face a sudden account closure or trading restrictions.
There’s no single answer.
The Spanish NLV is often better suited for those with high net worth and significant liquid savings.
The Portuguese D7 is generally more accessible for those with a steady, predictable retirement income, even if it’s more modest.
The best choice depends entirely on your personal financial profile and long-term goals.
No.
This is a common misconception. While proof of accommodation is required, simply buying a house does not grant you the right to live in either country.
You must qualify for a residency visa, like the NLV or D7, separately.
No.
While perfect for retirees, these visas are open to anyone with sufficient passive income or savings.
This can include investors with large dividend portfolios, landlords with rental income, or younger individuals with trust funds.
Feeling prepared to move forward? Use this checklist to organise your next actions.
Choosing between Spain and Portugal involves more than just meeting the visa thresholds. It requires building a resilient financial plan that accounts for exchange-rate swings, pre-funding private medical cover, and structuring tax-efficient drawdowns from your US retirement accounts.
If you are considering Spain or Portugal for retirement, ensuring your financial house is in order is the first step. PCC Wealth helps U.S. retirees build euro-denominated budgets that clear visa thresholds with buffers and structure their portfolios for the long term.
A well-planned transition allows you to focus on the sun and culture, knowing the numbers are taken care of.
Contact us today for a complimentary discussion.
We’ve Moved Offices on 1st August 2025!
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Effective Date: Friday, 1st August 2025
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